Amazon mulls alliance with Slack, Dropbox to challenge Microsoft in office apps market

Amazon Inc (NASDAQ:AMZN) is in talks with several software firms including Slack Technologies Inc (NYSE:WORK) and Dropbox Inc (NASDAQ:DBX) in a bid to create an alliance of firms to challenge Microsoft Corp’s (NASDAQ:MSFT) grip on the market for work productivity apps.

On Thursday, a Business Insider report said while still at an ideas stage, the ecommerce giant is aiming to partner with software makers to offer a bundle of business apps for one price in direct competition with Microsoft’s 365 product suite which includes the likes of Word, Outlook, Excel and Powerpoint.

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Any business customers that sign up would be able to use the new app package with a single log-in and receive a single price through the Amazon Web Services (AWS) cloud platform.

However, the report also said that Andy Jassy, who will replace Jeff Bezos as Amazon chief executive next week, has not yet signed off on the plans.

The move, if it goes ahead, will align closely with Amazon’s efforts to expand AWS beyond its existing cloud infrastructure business, through which the segment generates most of its revenue, and into software-as-a-service (SaaS).

The firm has yet to make a dent in the SaaS market despite launching a series of apps to compete with the likes of Slack and Dropbox, however, the creation of a corporate alliance with its current rivals could help circumvent this and allow it to gain access to an existing pool of customers.

Amazon may also be trying to cover both the cloud computing and SaaS markets ahead of Microsoft, which is currently looking to expand its Azure cloud computing arm to counter the dominance of AWS.

Additionally, Amazon may be attempting to take advantage of a resumption of corporate hostilities between Microsoft and Google, owned by parent company Alphabet Inc (NASDAQ:GOOGL), which on Wednesday ended a six-year truce designed to prevent open warfare in the courts and in front of competition regulators.

In mid-morning trading on Wall Street on Thursday, Amazon shares were down 0.1% at US$3,436 while Microsoft was flat at US$270.77. Slack was also flat at US$44.30 while Dropbox rose 0.2% to US$30.37.

Story by ProactiveInvestors